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How to Avoid Credit Collection Scams

Many lenders and creditors rely on third party companies in the debt collection business to go after delinquent accounts. Credit card companies use debt collectors like these to pursue charged off accounts all the time.

Many debt collectors who call on the phone are legitimate, but there are also scammers posing as collectors who will try to trick you out of money on debt that either does not exist or that has been cancelled or paid off. There are several things to watch for in avoiding such creditor collection scams. 

Beware especially any so-called debt collector who asks that you pay them with either a wire transfer or some other method that is non-traceable. 

Any legitimate debt collector is sure to accept a range of commonly accepted payments like credit cards, debit cards, or checks. Many nowadays even have online portals on which you can make a payment directly from their website. 

Any party asking you to pay by a non-traceable method is highly suspect. These payments that can not be traced are difficult to recover, even with the help of the appropriate authorities. 

Another thing to be careful of is when you do not recognize either the account or the creditor involved. In cases where you are positive that you never possessed an account with a company, the chances are high that it is actually a scam. 

You should not ever pay off a collection that you do not recognize. Federal rights allow you to demand proof of a debt before you send a debt collector any payment. 

The collection company must furnish you with not only proof of the past due debt, but also authorization that they are the ones to collect it. This can be important as many scammers today have gained information about old accounts which consumers actually had and are utilizing such data to trick them out of money. 

A faster way to check on a charged off debt is to pull your credit report. Unless the debt account is more than seven years old (at which point it will drop off) it will be there.